Microsoft Officially Welcomes Skype
Microsoft and Skype will empower people and businesses to connect in new ways. — Microsoft Corp. (Nasdaq “MSFT") has closed its acquisition of Skype Global S.à r.l. Negotiations of the definitive agreement under which Microsoft would acquire Skype …
Context & Ripple Effects
Microsoft’s May agreement to acquire Skype set a $8.5 billion communications bet in motion, followed by U.S. antitrust approval in June and the European Commission’s clearance of the purchase in October. The closing converts that approved plan into an operating Microsoft business.
The deal was announced alongside a new Skype-focused business division, while Skype had also outlined a future involving Microsoft and Facebook. Ownership gives Microsoft responsibility for turning those stated ambitions into product and business decisions.
First-order effects
- Microsoft takes control of Skype Global S.à r.l. and can place the service within the Skype division it announced when the deal was unveiled.
- Skype’s users and business customers move from an independent provider to a Microsoft-owned communications service, with Microsoft directing its product and partnership priorities.
Second-order effects
- Microsoft’s acquisition makes Skype a strategic distribution and communications asset alongside Microsoft’s existing software businesses, rather than a standalone partner available to set its own course.
- Facebook must manage its Skype-related plans with Microsoft as the service’s owner, making Microsoft a necessary counterparty for any continued collaboration.
Third-order effects
- If Microsoft can connect Skype with its broader products without weakening the service’s cross-platform reach, large software vendors will have a stronger incentive to buy communications networks rather than merely partner with them.
The trend: The Skype purchase is part of a shift toward major software companies owning communications services that can be integrated across consumer and business products.